Environmentalists have had a big win in their case against Australia's largest coal mine after the Federal Court overturned Adani's federal environmental approval to build the Carmichael coal mine.

The Indian mining giant's environmental authority has been set aside after the court found Environment Minister Greg Hunt had not properly considered advice about two threatened species – the yakka skink and the ornamental snake.

The Mackay Conservation Group launched its legal challenge in the Federal Court in January, alleging that greenhouse gas emissions from the mine, vulnerable species and Adani's environmental track record had not been taken into account.

"The Minister conceded that he had made an error and Adani did as well that the proper process hadn't been followed in approving the Carmichael mine," Mackay Conservation Group coordinator Ellen Roberts said.

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Environment Minister Greg Hunt.

Photo: Chris Hopkins

"He is required to take advice from his department on threatened species into account and he didn't do that.

"A lot of new information has emerged since Greg Hunt made his approval and we call on him to now reject the mine."

The project, which will produce up to 60 million tonnes of coal for export a year, has faced fierce environmental opposition because of the proximity of coal terminals at Abbot Point to the Great Barrier Reef.

But it has received praise from both sides of politics, including Prime Minister Tony Abbott, who declared it a poverty-busting miracle for India's poor.

Adani's environmental authority for the Carmichael mine in Queensland has been set aside after court action was taken by the Mackay Conservation Group.

Photo: Glenn Hunt

In a statement, the Environment Department said the decision to set aside the approval was a "technicality" and had been done with the consent of all parties involved in the case.

"Reconsidering the decision does not require revisiting the entire approval process," the statement said.

The Environment Department, the minister's office, Queensland's Labor government and Adani are insisting the issue is an administrative matter that will be resolved.

Adani's proposed mine and rail lines.

Adani blamed the court's decision on an error by the environment department.

"It is regrettable that a technical legal error from the Federal Environment Department has exposed the approval to an adverse decision," Adani's spokesman said.

Indian billionaire Gautam Adani.

Photo: Glenn Hunt

"It should be noted the approval did include appropriate conditions to manage the species protection of the yakka skink and ornamental snake.

"However, we have been advised that, because certain documents were not presented by the Department in finalising the approval, it created a technical legal vulnerability that is better to address now."

The department said it had followed "longstanding practice" in providing its advice to Mr Hunt and he had made his decision after "fully considering all of the Department's advice."

"Subsequently the Department has advised that there is a possibility that the advice should have been provided in a particular manner. This is a technical, administrative matter and to remove this doubt, the department has advised that the decision should be reconsidered," the statement said.

The department will now take six to eight weeks to draft new advice for the minister's consideration.

Mr Hunt has not commented on the decision.

The court's ruling is the latest in a series hurdles for the project that have led to questions about whether or not it will proceed.

There are growing calls for the federal and Queensland governments to put a stop to the development and investigate the approvals process for it after information that has been brought to light about Adani's environmental and corporate practices.